Stop Blaming Banks, Financial Institutions for Home Foreclosures - Buffett
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Warren Buffett's annual shareholder letter to Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) investors evokes some sort of response from the investing community. This year's letter brings up one interesting point about banks, lending, and jerks.
In his letter, Buffett, a large holder of Wells Fargo (NYSE: WFC) and BofA (NYSE: BAC), as well as a newly-revealed stake in JPMorgan (NYSE: JPM), said (on page 15) "Large numbers of people who have 'lost' their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost. In these cases, the evicted homeowner was the winner, and the victim was the lender" [emphasis ours].
Instead, Buffett thinks blame for the housing bubble should be shared by the government, ratings firms, and the media, along with lenders. He noted how JPMorgan, BofA, Wells Fargo, and Goldman Sachs all have repaid TARP funds received during the U.S. bailout in 2008-09.
Whether or not banks should be to blame is personal choice. Buffett said in October 2010 Wall Street helps society through finance, "like a church running raffles on the weekend."
In his letter, Buffett, a large holder of Wells Fargo (NYSE: WFC) and BofA (NYSE: BAC), as well as a newly-revealed stake in JPMorgan (NYSE: JPM), said (on page 15) "Large numbers of people who have 'lost' their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost. In these cases, the evicted homeowner was the winner, and the victim was the lender" [emphasis ours].
Instead, Buffett thinks blame for the housing bubble should be shared by the government, ratings firms, and the media, along with lenders. He noted how JPMorgan, BofA, Wells Fargo, and Goldman Sachs all have repaid TARP funds received during the U.S. bailout in 2008-09.
Whether or not banks should be to blame is personal choice. Buffett said in October 2010 Wall Street helps society through finance, "like a church running raffles on the weekend."
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